Closing Bell - Closing Bell Overtime: AI Spending Faces New Questions as Markets Look for the Next Catalyst 7/7/26

Episode Date: July 7, 2026

Markets weigh the next phase of the AI trade as investors debate whether hyperscaler spending can keep accelerating. Gene Munster of Deepwater Asset Management explains why Amazon's latest debt raise matters, why cloud and AI capex remain the key story for tech earnings and why he expects investment by the hyperscalers to stay stronger than Wall Street expects. Max Kettner of HSBC makes the case for remaining bullish on risk assets despite growing skepticism around AI. Former Nasdaq CEO Bob Greifeld analyzes SpaceX's growing market influence and SK Hynix's U.S. market ambitions. Plus, Diana Olick's latest CNBC Housing Market Survey, showing sellers are losing the upper hand as conditions shift in the housing market, followed by a look ahead at the next catalysts for investors. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

The bells bringing in to the training day at the NYSC, Goldman Sachs, asset management doing the honors. And at the NASAC, deep fission ringing the valve. Welcome to closing bell overtime. We're live from studio be at the NASAC market site. I'm Melissa Lee along with Mike Santoli. Stocks lower today as tech lags once again, doubt with small losses. S&B off half a percent to a $7.503 year at the settle. The NASAC, the laggard off by more than a percent.

A not big enough quarter for Samsung leading to a drop in every area of the trade, semi-chips, energy, and energy. infrastructure, GE-Vernova, one of the worst performers in the S&P 500. The buying once headed to health care financials, with that sector, ETF, hitting an all-time high, much more on the market straight ahead. On our radar at the close, another tech giant taps the debt market. SpaceX doesn't get the NASDAQ 100 or bullish analyst bump, and the advantage turns toward the buyer in the housing market.

So, yeah, 7,500 on the S&P. We got there for the first time. Almost two months ago, market is trying to sustain. stain this really rapid and kind of jumpy unwind in semiconductors. It's hard to get two bearers if I say markets down half a percent and 10 percent of the S&P 500 stocks made a new 52 week high today. That is what happened. So you can give credit to the market for spreading it out and trying to kind of marshal the defenses. I still think it's a little bit too erratic and too twitchy and the leading parts of the market can only perform when other stuff is down. I mean, it's kind

of a funny dynamic. Yeah, I mean, you take a look at the DRAM. ETF. That sounds seven and a half percent. the Samsung news, as we mentioned, not good enough. We've seen this time and time again, and it didn't mean that that trade was over. So, right, we started with Micron and we saw, you know, that sector sort of recover. We'll see with S.K. Hynix, that is the next sort of test from the memory market if that U.S. listing, the ADR listing on Friday is going to be met with some demand. Yeah. But we did, you know, this Caspi, that really, I mean, that was an amazing.

Incredible. Yeah, it's the whip end of this entire trade. Now, it's true. We have recovered every one of these sharp pullbacks. We're down like 18% or so in semis in the U.S. At this point from the highs. And we do know that it was more crowded and kind of more overdone on the upside than we've had in these past runs. But as I say, the overall market managing to hang in there.

Mag 7 and semis are kind of acting as opposite ends of the seesaw here. So we'll see if that continues. Let's get to Christina Parts Nevelas now for a look further into today's biggest movers. Christina. Well, you guys talked about it. Stocks closing lower across the border. Really a reversal from earlier, especially when the Dow said our intraday record, The selling started overseas.

The South Korea Cosby dropping nearly 5% after mentioned it. Samsung's preliminary results, which had record profit, but just failed to impress investors once again who had priced it in for perfection. And that really revived the AI valuation worries, and that also hit U.S. chip names like Micron Sandus, Questern Digital, Nvidia, also turning flat. Invita was also pressured by a separate report from Reuters that China's Deep Seek is developing its own AI chips competition. But pockets of software actually held a Palantir in the Cloud ETFWCLD also climbing higher,

but not massively still, notched a seven straight gain. And then last but not least you had meta climbing after launch or climbing in the afternoon, I should say, after they just announced that they're going to be launching news image, the first image model from its super intelligence labs. And then among these sectors that were tech-related, industrials fell the most energy and real estate really led the gainers. Oil rose on reports that Iran struck a Qatari-LNG tanker. And with higher crude, it actually hit the airlines.

That's why you saw United Airlines Delta. The list continues closing in the rent at least 3% lower. Financials were a bright spot with the XLF, ETF sitting near an all-time high. And you talked about that rotation back into the winners and losers. Consumer Staples. A bit of a bounce for General Mills, Coca-Cola, Kraft-Hines, after posting losses just yesterday.

today. All right. Thank you, Christina. Well, bonds on the move today as well with the 30-year trading back above the key 5% level. Rick Santelli in Chicago with more on all that. Hi, Rick. Hi, Mike. Indeed. You know, some continue to monitor a 30-year bond, but the real part of the curve to pay attention to, obviously, is the 10-year and the 10-year above 4.5%. So we continue to monitor the rise in rates. As a matter of fact, what coordinates here is, The last time we closed above 5% in a 30 year, and the last time we're at these levels, 454 and a 10, was exactly the same day, the 10th of June. Now, one of the driving forces obvious has been all the issuance,

and it isn't only AI-related issuance. It's also sovereign debt. Today we had 58 billion three years to kick off 119 billion in coupon supply for the next several days. And that competition? Well, it didn't seem to be the biggest very year. The biggest variables seem to be oil. You see the tenure on that 12-hour chart along with crude oil, they go hand in hand. Even the dollar index was involved late in the day in its rally as crude oil moved higher.

Now, what we do want to continue to pay attention to is if there's a tipping point reach. And what does that mean? Well, whether it's Amazon, whether it's meta, whether it's all the AI names and sovereign debt, whether it's the U.S., the U.K., the EU, Japan, a lot of issuance, and much of it is investment grade. And when will investors have a belly full? Well, we don't quite know that yet, but we do know that investors sold some of their other AI-related debt to make room for today's Amazon. Melissa, back to you. Rick, thank you, Rick Santelli.

Oil prices moving higher in the afternoon after the Treasury Department says it will revoke the license that authorized sales of Iranian oil. Pippa Stevens joins us here on set with the latest, Pippa. So a late-day bump for oil up more than 5%. So we're talking about the waiver that had been issued on June 22nd. It was in effect for 60 days until August 21st, and it was more sweeping than prior waivers. It would have allowed for sales of Iranian oil into the U.S. as well. Now, a White House official did say that the MOU was entirely performance-based and that Iran would only reap the benefits if they exhibit good behavior. And they said that Iran's actions in the strait are, quote, wholly unacceptable.

This does come after we saw three vessels hit in the strait. Saudi Arabia confirmed one, also Qatar, an LNG vessel. Notable there because Qatar had been acting as a mediator between the U.S. In Iran, we saw European natural gas prices up another 6%. So what this does speak to is the fact that this is by no means over and still a precarious situation. The market had largely looked past what was going on in the straight right now instead focusing on all of the flows exiting hormones and the coming oversupply narrative. But this, again, just shows it is still, you know, an active war situation. And the fact that we're only at 72 here does speak to the fact that maybe there is more room to the upside.

It's interesting, though. You mentioned June 22nd because that's the last time we saw 70. We're not really, you know, a 5% pop is a lot, but it gets us back to June 22nd levels. Exactly. Exactly. We're not seeing anywhere near the same type of swings that we saw at the beginning of the war, largely because we just haven't seen the same, you know, type of kind of sticky demand that people thought would send prices to 150, even 200, that by no mean came to fruition.

But I think we do need to continue to look at these product markets, because those prices did actually rise above 200. For right now, if you look at diesel futures, they're now trading. double what oil is trading, as we talked about yesterday, 321 cracks still very strong. And so that's really where the tightness is being reflected. Those are the markets to watch. We've seen kind of this trade of short, crude, long products, whether or not today's news kind of changes that positioning remains to be seen, but the product markets are still

signaling some tightness. Are we seeing those prices in the consumer market, diesel? Yeah, so that's one thing to watch, especially in California, given that we are still a buck 50 above where we were at the beginning of the year. Port of Los Angeles and Long Beach together are the busiest port complex in the U.S. they handle about one in every five goods that come into the U.S. via vessel. And so those goods before they end up on U.S. on shelves and, you know, in our homes, those are transported on California trucks playing California diesel prices.

And so while it might seem like, oh, what's happening in California, they have their own strict fuel standards. Those prices don't impact the whole country. They actually do because a lot of the supply chain originates in California. All right. Pippa, thank you. Pippa Stevens. Amazon is once again adding more fuel to the AI debt boom. Sources telling CNBC that the company is planning to raise at least $25 billion in a bond sale.

The move comes just four months after it issued $37 billion of bonds in the U.S. market. In the past five years, Amazon has tapped nearly $100 billion in capital market. Sources telling CNBC that the company will not issue more debt this year. This is just the latest example of the billions that tech giants have been borrowing to fuel their growth. joining us now as Deepwater Asset Management, managing partner, Gene Munster. Gene, great to see you. Hello, Melissa. You say that this proves that the AI buildout is in its early innings.

Is that necessarily a good thing for investors from the stock perspective? Absolutely, because if, in fact, the growth rates are higher than what people expect, not just this year, but next year and in 2028, that means that the numbers for a lot of these companies that are, of course, supporting this trade will be higher. there is a question about what the multiple investors are willing to pay for that. We've seen this dynamic where as numbers go higher and higher and higher, that just increases the anxiety from investors that eventually we're going to kind of hit the wall. And so the sliver of good news related to what's going on with Amazon here, I think is an

important tell. And I just wanted to try to quickly put some numbers around this for your viewers, is that right now the street is looking for, of course, one of the key metrics related to the health of the AI trade. The street's looking for 23% cap-x growth from the hyper-scalers for next year. And now, a few weeks ago, that was 17%, so it's gone up to 23. If we take what CNBC's reporting is here on this $25 billion raise from Amazon and look at the recent comments from Google on their capital raise, that probably suggests that the numbers are going to be up around 37%, so much higher.

And so, Melissa, clearly the addition key is in scope here for these AI infrastructure companies. your point about, well, that benefit investors comes down to ultimately the multiple that will be paid. And my sense is that even though there's going to be anxiety around these numbers going into the print at the end of June, that the general takeaway is still going to be that these companies still have much longer to grow. And I think that's going to be a positive. Yeah, Gene, I mean, that feeds into a positive story for the infrastructure companies, but the way the market has been treating the entire sector, the entire ecosystem is being suspect of the return. from the spenders. And I wonder what these companies can do to reassure investors that when they

raise CAPEX, it's because they directly see the benefits, because it feels like they're in a little bit of a trap. They have demand for cloud services. They can only access the demand if they increase compute. The compute's getting more expensive. And so investors have a little hesitation around that equation. Definitely that hesitation. I'll just add to that as the journal had a story today, which just talked about the concept that meta is now kind of going to be leasing some of its infrastructure to other AI players. And of course, what Spadesesick is done is a sign that we're at this overbuilt phase. But the part that doesn't line up from my perspective, when we think about, you know, some of the concerns that you mentioned, when we think about what this concept that

effectively were overbuilt, is just take a step back. And think about the big picture here, ultimately what's going on, is that we've seen this incredible investment around cap, over the last several years, but the actual use of AI is still relatively limited. This here's some fun facts is that if we look at ride share, for example, this year it's going to be about 0.6% of total rides are going to be autonomous in the ride handling market. That's going to go to about a percent and a half next year. So that's on the physical AI side, not to mention on the application side, I still think that the number of use cases are largely limited.

And so ultimately, I think that those are going to grow. So, Mike, what this ultimately comes down to as you're investing in this, the numbers are going higher. There's no question about that. The ultimate question to ask is, do you believe that we are so early in AI that this can power a continued higher numbers for the next several years? And I think the answer is yes. Investors do seem to be focused on applications and consumer and business use of AI queries, et cetera. But physical AI is the next piece of it, Gene. In terms of how much that will drive that growth, how do you think about the physical AI piece of it versus the sort of large language model, you know, query piece of it.

I can go back to some comments that Jensen has had, and he talks about this being kind of a third of the broader size of overall. I think Elon's talked about kind of half of the global economy is in some sort of labor that can be automated by physical AI. And so maybe you split the difference, Melissa, and call it 40%. But I think the point is that the physical AI piece just obviously hasn't started. And ultimately, is do you believe that vehicles should be safer? It's important to, I think, point out.

We look at what Waymo has done here around their head campaign in the World Cup. I've got emphasizing that safety piece. These are really important parts around why physical AI can be so big. So, Melissa, I think of this is kind of a 30 to 50% positive impact on the overall AI spend. All right. We'll see. The market's mood has changed around these questions so many times. Gene, we'll see if we're for another shift.

I appreciate the time, Gene Munster. Let's turn to the broader markets. As we mentioned, they were dragged down on renewed scrutiny around the air. AI trade, but are those concerns enough to make a real dent in the push hire for equities, which continue to find other sources of strength when AI falters? Joining us now is Max Kettner. He's chief multi-asset strategist at HSBC. Max, good to see you.

You heard the conversation. I know it's a very familiar one based on I'm sure your discussions with clients right here. Are we having another crisis of faith in terms of, you know, whether AI is a zero-sum game, whether it can continue to animate this bull market? where do you come down on that? Yeah, I think those narratives, they've been around, right, for almost a year now. We've started that really with the Q3 reporting season last year. I'm not quite sure whether, you know, that is really a narrative or whether that's really

facts. Because quite frankly, this is the third wave where we have that sort of AI overspending slash AI funding slash do we really or are we really going to be able to monetize AI spending and those AI cap eggs. it's really the third wave of that narrative. Now, so far at least, you know, that narrative can last for a couple of weeks, but after that, you're kind of done, right? Because suddenly you start realizing that the numbers are just there,

you know, and the numbers actually don't justify that sort of scary narrative. But I think that's what's going to happen in the Q2 reporting season again. I think actually when you look at the hyperscalers, what you've seen, obviously, now from mid-May until the end of June, that almost 20% drawdown in the US hypers, that really looks unjustified for me, right? That really does look a little bit overblown. So I would be leaning maybe a little bit less into the semis

and into the build-out names, but more into the hyperscalers, embracing a little bit that broadening theme as well. We've been in that for a couple of weeks already, and we continue to be that, because when you look at the US data, you look at high frequency and low-frequency, activity data, labor market data, you name it,

it still goes from strength to strength. Why do you think the hypers, deserve a look at this point, Max? I mean, is it valuation-based? And if it is valuation-based, what do you base that valuation on? Because their business models have fundamentally changed in terms of taking on debt and being cash flow negative for some of them. How do you view these and how do you sort of set up those metrics compared to the past to say, you know what, right here, right now, they look good? I think part of it is valuations, but a big part of it is also low expectations, right? We go into the Q2 reporting season, not really with hopes that they might deliver and might be

over-delivering. No, we go into the Q2 reporting season with the opposite. We go into that season with basically saying, oh, my gosh, are they really going to be upgrading CAPEX even more? How are they going to fund it? Now, imagine if we go into that Q2 reporting season now, and the hypers keep telling us, you know what? We're still making a lot of money.

We actually are still over-delivering and exceeding earnings estimates. and therefore we can actually allow ourselves to still keep on spending on AI. And I think that would really take the window the sales of some of the AI bears and some of those AI funding concerns and AI overspending concerns. Now, to your point on, you know, them having to tap the debt markets, so what, right? Let's be honest. I mean, tech overall and the IG index and the US IG index is only about 10%. And issuance so far this year, it hadn't been like it's, you know, 90% of issuance.

No, it's only been a tiny bit more than the index weight. So I wouldn't be too concerned on that, to be honest. Yeah, obviously the corporate bond market is more than willing to sort of hand the capital over at this point of pretty attractive terms. I guess finally, Max, all that you've said suggested that you don't necessarily believe this storyline that we should wish for a broadening of this market away from tech where you have old economy sectors leading and this. broadening out of earnings growth. As much as people want to see that, it feels, I think, somehow more virtuous to have the market be like that. It hasn't stayed that way for more than a few months at a time over the past few years. Yeah, I think that's what we're talking about, Mike. I don't think we're talking about a, you know, a healthy market in the next two years,

or a supposedly healthy market in the next two years where suddenly it's going to be the equal weight S&P outperforming for the next one or two years. You know, when you look at the next couple of months, I think coupled also with the Q1 reporting season, what's happened three months ago already was that earnings were over delivering, not just in tech and AI. Obviously, tech and AI, the microns of these worlds, you know, they were really the ones that were catching the attention. But when you looked at median earnings growth, when you looked at the average earnings speed, you looked at the earnings beat rate, it was a broad-based earnings surprise, right, across all the sectors. What we haven't seen so far is broad-based performance.

Now, just to give you a number, when we look at, for example, at Tech and AI within the SMP, that's been going up more than 40% since the beginning of March. When we look at the rest of it, which is about 50% of the ESMP, that's just about crossed the watermark from where it was at the beginning of March. It's just about recovered now in the last three weeks. Those residual losses that it's never really been able to make up during the equity rally in April and May and for large parts of June. And I think that's what you want to lean into tactically

because I think we once again, I get a broad-based earnings delivery now in the next couple of weeks. But after that, yeah, we're probably done, I would argue. Max, great to speak with you. Thanks. Max Kettner. Coming up, Eli Lilly's shares fell more than 14% in the first quarter, but it has reversed course in the past three months,

up more than 30%. So why have investors gotten so bullish on this big pharma name and the health of housing or new exclusive CNBC survey showing sellers no longer have the upper hand in the market. We'll take a look at why the tide has turned. You're watching Closing Bell overtime, live from the NASAC market site. Welcome back. Shears a FISA moving higher today on reports that the company held talks with some U.S. banks to sell one of its networks that handles debit card transactions. Owning the network would allow the big banks to get around the law that limits the fees they earn on debit card transactions.

Those limits were put on them by the 20. 2010 Dodd-Frank law. Now, FISA has been under pressure recently, down 70% in the last year. Analyst at Wells Fargo saying today they think big bank owning a debit network could modestly pressure Visa and MasterCard. And those shares were on the defensive today. It's kind of, you know, full circle. The banks actually founded Visa and MasterCard as a consortium. They used to own them. They came public. They needed capital. They want to let them grow more. but it seems as if owning the network and having kind of a direct line as opposed to a deal with the middleman was also one of the things that was driving the Capitol One Discover merger last year.

Yeah, it does have that sort of echo of that. You have to wonder, though, what the political blowback would be for such a deal because it would alienate a lot of customers. I mean, they have a lot of community banks and unions, for instance, as their customer base. And it's not going to be politically popular, I would think, amongst the public since Dodd-Frank was put into law. And this particular, the Durbin amendment was put into law in order to protect consumers from having to be. Yeah, I don't know if they would, if the banks would simply be capturing whatever fees or they would just not have to share if that's the way it goes. But also merchants, I think, have also always complained about these interchange fees. And there

are another constituency. Well, Eli Lilly, an outperformer today hitting a 52-week high, J.P. Morgan hiking its price target on the drugmaker from 1400 to 1400 from 1,300, reiterating its overweight rating on expectations that strong growth of its weight loss drugs will help fuel second quarter earnings. Angelica peoples looks at the optimism surrounding Lilly's stock and what could be next for the company, Angelica. Hey, Melissa, well, it is all about obesity still. So Lily's weekly weight loss shots, Monjaro and Zepbound are still the main focus for investors. And Zepound really dominates here in the U.S. and Monjaro sales are picking up overseas. So analysts here, they don't have as much visibility into international sales. So there's more room for upside, right?

And you saw that dynamic play out last quarter when Moundaro sales came in almost a billion and a half dollars ahead of consensus. And Lily, of course, also has that new GLP1 pill Foundaio. And that's a bit of a question mark. So telehealth providers that I talk to say there isn't as much interest in Foundaio as there is for the Bogobi pill. But analysts still expect about a billion dollars in Foundaio sales this year. Then next year, Lily expects to launch its most powerful weight loss drug yet, Reda Trutide. And Lily has more experimental obesity drugs behind that. including its amylin agonist allora lintide and outside of obesity lily's trying to get investors excited

about other parts of its portfolio like neuro cancer immunology and they are pursuing mna like they never have before but it's really hard to get that focus away when obesity really could be the largest ever pharmaceutical market guys is there what's the thinking angelica behind found ao sort of being a question mark at this point is it because lily hasn't engaged in full scale direct to consumer marketing yet which is supposed to ramp up in the third quarter. I mean, you would imagine that a pill that can be taken at any time of the day, so the consumer has a little bit more leeway with how and when they take it would be attractive. You know, it depends who you ask Melissa, right?

When you talk to Lily, they say that they haven't started the advertising, like you said, and that it's going to take time because this is a brand new brand, and people aren't familiar with it like they are with the Begovi pill. But when I do talk to telehealth providers, they say that that weight loss differential is really attractive to people because studies have shown that you do lose more weight with the Wagovi pill than you do with Fondaio. And Lily will say, well, it is convenient. You could take it any time of day. And the Wagoe pill has those restrictions.

You have to take it on an empty stomach first thing in the morning with a little bit of water. But so far what I've heard is that that really hasn't been a barrier. So again, you know, the people that I talk to the providers say that, you know, they think that it could take time. But they so far are seeing that consumers just really are responding better to that weight loss differential. All right. Angelica, thank you. Angelica Peoples. Coming up, CNBC investigates how a Shanghai-based company, the Pentagon says, has ties to the Chinese military, has become embedded in America's autonomous future and the concerns about the national security risks. It's raising. The race to build out physical AI is on from self-driving cars to humanoid robots, and at the center of it, Hesai technology, a Chinese maker of LIDAR, the sensors that allow these technologies to see their surroundings. But HESI has been blacklisted by the Pentagon, which says HESI has ties to the Chinese military. Despite that designation, Hesai has partnerships with AI leaders from NVIDIA to Amazon Zooks and legally,

because being on the blacklist only prevents HESI from securing DOD contracts. That, though, raises concerns and questions about the security risks the public may be exposed to, including the possibility that China could access the data the LIDAR collects or use malware to tamper with the LIDAR. Here's a preview of blacklisted. How vulnerable is LIDAR? It's easy to physically spoof LIDAR. Miroslav Pajek is a professor at Duke University who studies vulnerabilities in these sensors. He says any LIDAR sensor can be compromised with malware inserted at the factory during production or through firmware updates.

Malware can be difficult to detect since companies deploying the LIDAR usually cannot access the sensor's proprietary source. source code and malware can remain dormant until triggered. If that happens, the malware can trick the sensors into creating a false picture of a vehicle's surroundings. He demonstrated this in real time at Duke's lab. So we have in front of us a LiDAR. Yeah, off-the-shelf state-of-d-R device. It is transmitting laser pulses and those pulses are used to map the world around us. So pretty much it's building a 3D point cloud and as you can see, there are two of us in the scene. So we're here. We're here.

Nobody else. Okay. What we have here is a triggering device. It is sending a similar laser pulse. It just has an encoded, a secret key command that triggers the malware that is deployed on that particular device, on that lighter. So when I press this button, it triggers this malware. It will generate the third fake person. You see there's no one here.

Right. But we see in the point cloud that there is. another person that is joining us. Other demos from Pajek's lab show how objects can be removed from the sensor's data, causing a vehicle to crash. We are preparing now a demo where you fly a drone

over it, and you can then, like, I know, all the vehicles in the area that have that kind of sensor will be triggered immediately. So think of it from DOD applications. You have deployed like a swarm of ground vehicles or drones, and then all of

And then everything has been disabled or even worse attacking their own forces. And in theory, you could apply that to an autonomous vehicle fleet operating on a city street with the drone flying over to trigger the malware. Yes, yes, yes, yes. It's not science fiction. No, no. We can do that in a month. Yeah.

As I told us, its products have cybersecurity certifications and incorporate robust measures like data encryption in light our authentication to ensure its sensors are protected against hacking. In a statement to CNBC, NVIDIA wrote its autonomous platform is consistent with all regulatory and commercial requirements. Zooks did not respond to our request for comment. HESI says its products are sold exclusively for civilian use and is appealing the blacklist designation in federal court. You can see the full story in our extended interview with the HESI CEO.

You can head on over to CNBC.com slash blacklisted. And of course, we were just talking with Gene Munster about this physical and. AI build out. And that really is a question here at this point in time when everything is being built out, which components are we allowing into this critical infrastructure and how secure of these components? Right. And the Department of Defense, in putting these products on the blacklist, do they specify what they believe the vulnerabilities might be, or is it just kind of a precautionary thing? Or they just kind of say off limits for military use? Off limits for military use, and it's because of ties to the Chinese military. So HISA, it's

interesting because HESI sued the DOD over the blacklist designation to see what evidence the DOD had so it can actually attack that evidence. And in this interview, it was an unprecedented, it was a two-hour interview with the CEO of Hesai. And we asked them about every single point of evidence, including, you know, why is it in a civil military fusion district? Why has its products appeared on military vehicles or seemingly appeared on military vehicles? So what are those ties to the Chinese military. And we should note, too, that in its listing and its disclosures, it is required by the SEC to disclose its ties to Chinese government in that the Chinese government can intervene at any time or influence operations at any time. That's standard for Chinese companies,

but we should also overlay this with a web of Chinese laws, cybersecurity law, counter-espionage law that basically say Chinese companies are compelled to share the data that they collect. Right. And so that's the fear. And then I guess quickly, is there other, how constrained is the supply of these types of products? In other words, are they kind of an industry standard provider of LIDAR? They have a third of the global LIDAR market. So it's not necessarily that they're standard, but they are among the lowest cost option out there. They are U.S. made LIDAR sensors.

They cost could be 50 percent more. And so when you're building these systems and you're saying, you know what, you know, automotive OEM, GM, G.M., etc. You want to create a platform. Here's your pick of LiDAR sensors. Are you going to pick one that's 50% more than you have to pay for? At this time, with the buildout race on, probably not. Yeah. And notably not Tesla, which does not use LiDara. Exactly. Exactly. All right, time for its CNBC News Update with Contessa Brewer. Contessa. Mike, a federal judge ruled today. The Justice Department cannot have access to the names and contact information for everyone who worked in Georgia's Fulton County during the 2020 election.

The DOJ obtained a subpoena, but the county succeeded in getting a judge to squash it on grounds. It was meant to target, harass, and punish the president's perceived enemies. Prosecutors in Utah today played a video at a preliminary hearing, they say, shows Tyler Robinson in a sniper's position on the roof of a nearby building when activist Charlie Kirk was killed. Robinson is charged with Kirk's murder. The evidence was presented on day two of a week-long preliminary hearing before trial, and prosecutors said, say they will seek the death penalty if Robinson is convicted. And far-right French politician, Marine Le Pen, says she will make a fourth run for the French presidency despite being sentenced today to wear a court-ordered electronic monitor for an embezzlement

conviction. Le Pen says she'll appeal the sentence to France's highest court to have that electronic bracelet removed. That's the news now, Melissa, I'll send it back to you. Contessa, thank you. I had the Elon Musk glow, the Nazak one. 100 inclusion and the large number of bullish initiations, not enough to keep SpaceX shares from falling now below its opening price on IPO day. We'll take a look at the next move. Next. Plus, what role

could the SK Heinex U.S. listing play in the rotation out of the chip sector? You're watching closing bell overtime on CNBC. Welcome back. SpaceX trading lower in its first day as a NASDAQ 100 index member. The move comes less than a month after its June 12th IPO. Despite the high profile, the stock carries just a 1.3 four percent weight in the index due to its limited public float. And today, a range of analysts kicking off coverage of the company as the street continues to try to pin down a valuation. Analysts largely bullish with many pointing to Starship as the key driver of growth projections and many pointing to basically whether this supersized rocket will be reusable and kind of reach

economies of scale. Joining us now is Robert Greifeld. He is the former chairman and CEO of NASDAQ, former chairman of Virtue, as well. He's currently managing partner and co-founder of tech investment from Cornerstone Financial Technology Management, as well as the CNBC contributor. Bob, good to see you. Welcome. Great to be here there, Mike. And hello, Melissa. You know, we've been in bull markets before. We've seen active issuance schedules before, Bob. But this is kind of unique in the sense to me of how much value has built up in a lot of these

companies, whether it's SpaceX or the AI companies or S.K. Hinex, before they access U.S. public markets. What are the implications of that to you? Well, it's amazing things SpaceX was formed 23 years ago. So certainly that did not exist in the past. And one of the aspects of it is when I think of SpaceX, there's a lot of questions about entering the NASDAQ 100, and I've been consistent. The bigger issue is you have share lockups happening of worth about $800 billion

between now and the end of the year. So when you think about it, since you've been in business for, 23 years, you've been giving stock out or selling stock for that long period of time. And when they're a private company, they're locked up. They're not going to be locked up. So what is the selling pressure going to be as these lockups transpire? So any company has been private for a long period of time, more and more of them, as they go public, focusing on the lockup gets to be more and more important. So, Bob, in terms of how, you know, an issue like a SpaceX trade, we're seeing it under some

today. And you have to wonder, you know, when investors, by the time a regular investor gets a hold of these issues that had existed for so long in the private market and had been available for investing by a more elite group of investors, perhaps, that they're the last to the game. Is there any concern your part that the way they perform in the aftermarket will sort of turn off maybe everyday investors? No, I wouldn't say that. I could see, you could see the mass. gains in the beginning, but when you go public, it's not the end of the game. It's the beginning of you new life as a public company. So we expect SpaceX to be around for 10, 20, 30, 50, 100 years.

So there's a lot is going to happen in that period of time. So if I'm a new investor into it, I've got to look at it prospectively what's going to happen in the future. And the fact that it was private for a long period of time, I would not let that sway my calculation on whether or not it's a good investment. And now we have S.K. Hewiner. the Korean memory chip maker, going to access U.S. market, it's going to list an ADR here while raising funds here. What should we interpret this as? You know, is it essentially just, hey, U.S. investors have easier access to this big, important company, or is this company kind of looking for, you know, where the lowest cost of capital is and therefore the most aggressive gullible

investors are? Well, those two issues I wouldn't complain together. It's lowest cost of capital. It's also probably more importantly, the deepest, most liquid market. And we also have very wise investors coming into this market. So as you mentioned, I'm running as one of my activities, a hedge fund, and it's shocking the lack of liquidity in markets outside the U.S. when you get away from the open of the close. So if I'm any company of size today, it's hard to avoid the U.S. capital markets. They're deep, they're liquid, they're efficient, and you get your best execution through that. So I'm not surprised that's happening. Now, when you look at this IPO also, people are coming to me and say, is that going to impact or cause other people to crowd out of other stocks? The U.S. IPO, the U.S. capital markets, is $70 trillion. So this IPO, whether it's $25 billion or $30 or $35 billion, just as a drop in the bucket. So we have the ability to absorb this new company coming into it without any difficulty at all. That is not true in all the markets around the globe. I would love to have a conversation with you at some point, Bob, about your hedge fund and how you're training.

It sounds, though, overall, that you are bullish where we are in the markets right now. I think I am. You know, when you look at the PEs historically, we're not at a high level. The earnings growth has been obviously very, very strong. And that at the end of the day is what matters, right? Do you have macro issues with respect to the governmental debt that we're piling on? That has to be in the back or forefront of people's minds. but if you look at the core fundamentals of companies today, they're fairly priced. Yeah, I mean, the profit story has been the one piece of the puzzle that hasn't wavered very much in the last couple of years.

It's been true. Yeah, no, I appreciate it. And we'll get to you to talk about perpetual crypto futures, all the rest of it down the route. Special futures. We'll do that next time. We will. I really appreciate the time today, Bob. Thank you.

All right, thank you. All right. Step next. We'll break down the recent tug of war between the tech leaders and the broader market. And Rivian shares sinking after announcing a secondary offering of 75 million shares. That news offsetting better than expected second quarter revenue and delivery guidance. The stock now giving up all the gains it made after announcing strong first quarter deliveries on Thursday. Close the bill over time. We'll be right back. So much talk of the market's attempts to broaden out beyond mega cap tech.

Here's what it looks like over the last year. It's kind of an image of divergence and reconvergence. So there's S&P 500 and then the equal-weighted version of the S&P. What I'm pointing to here is this peak in late October in the S&P 500, it went nowhere for months. At the same time, that was a pretty sharp outperformance period of the equal-weighted S-SP. What happened? Mag 7 peak there. We got some nervousness about AI investment volumes.

And the underlying economy started to quicken up a little bit. Cicicles got a bit. Okay, then what happens? We all go down together with the Iran War. and then mega caps carry us here. And now here we are flattening out again. We've been almost two months as equal weight catches up. So, you know, really the equal weight has been kind of playing defense when the leaders have been tired or had to reset lower.

Take a look at a different version of this. This is a five-year. This is the NASDAQ 100 against Berkshire Hathaway. And this is really fascinating how they were equal and opposite during Liberation Day. And just now curling up a Berkshire Hathaway, insurance stock is doing better as, NASDAQ 100 maybe falters a little bit. So I don't know if this means that really the tie is changing underneath the market or we're just sort of relieving some of the extremes. It's an interesting setup, especially going into earnings season, as we are putting such scrutiny on the hyperscalers in the AI trade as a whether or not they're going to live up to expectations.

We do have earnings revisions move higher across the board. Without a doubt. Yeah. Yeah. I mean, expectations are high. Earning season is often a period where stocks go their own way as opposed to moving all at once in terms of the index movement. so maybe that we're just set up for more of the same, these kind of offsetting currents. Well, homeowners are increasingly losing leverage in negotiations with buyers as the market

becomes more balanced to look at what that could mean for home prices. Straight ahead. Closing bell overtime live from the NASDAQ market site. We'll be right back. Welcome back. The real estate tide may finally be turning after several years of sellers having the advantage in a lean and pricey market. CNBC's quarterly housing market survey finds that buyers are finally regaining leverage and pulling

the market back into balance. Diana Oleg joins us from CNBC's virtual neighborhood. Diana. Yeah, welcome to the neighborhood, Melissa. Look, in the second quarter of this year, 44% of real estate agents in CNBC's housing market survey said they were seeing a balanced market between buyer and seller. That share is up from 30% in the third quarter of last year when CNBC began its quarterly survey. Now, home sales in May were up slightly, 3% higher than the same month last year, according to the realtors. That was the result of more supply on the market, and easing prices. Now, while closed sale prices are still higher than they were a year ago nationally, asking prices are coming down, and as a result, fewer contracts are getting canceled.

Just 40% of respondents to CNBC survey said they had at least one contract fall through in the second quarter. That compares with 51% in the first quarter of this year. Now, as for buyer concerns, mortgage rates and prices have overtaken the economy as the biggest concerns reported by agents during the second quarter. The Iran war sparked big worry back in March, but that seems to have abated a bit. At the end of last year, when we first asked this question, 26% of agents said their buyer's biggest concern was mortgage rates. That jumped to 33% in Q1 and 37% in Q2. Now, we have so much more from this survey in today's Property Play newsletter. If you haven't subscribed yet, it's free, CNBC.com forward slash property.

And we've also got a great article in there about the Manhattan office recovery. to read, Melissa. I wonder, Dan, if time on the market has decreased? No. Time on the market has actually increased, and that's why buyers are gaining more leverage. So they're saying, okay, do I need to jump immediately? And again, all real estate is local. But I'm just speaking from a national picture, is that you're seeing homes sit longer and you're seeing the volume of homes on the market now. Inventory is rising. And that says to buyers, okay, maybe they do want to buy a home, but they don't have to jump. They can take their time.

They can shop around. They can say, I want these contingencies, which maybe we were not seeing two, three years ago. In fact, at the peak of the pandemic surge, it was, you know, no contingencies, all cash, jump the minute. You see it and you like it. And is the new supply, Diana, the increased supply, mostly just, you know, existing owners, sort of feeling like it's time. You're getting far enough away from those pandemic distortions, or is it actually new construction? It's not really new construction because we know that housing starts are not keeping up with what the demand is out there. In fact, it's coming down a bit because of higher mortgage rates.

What we are seeing is there's more supply because, you know, look, it was the leftover of the spring market, which started late because of the war. So you're seeing more sellers list who need to get out of their house. Look, sometimes people just have to move. And then the fact that homes are sitting on the market longer just increases that oversupply, that supply over time. All right. Diana, thank you. Diana Oleg.

I want to take a trip to the virtual near. I know. I want to see, like, if dot com is across the street. Or maybe you can even just input what you want to see in your neighborhood there. I don't know how it works. Pretty fun, though. I guess tomorrow we'll see if it breaks the tie. You know, we had yesterday it was, oh, we got semis bouncing and it's controlling the whole market today.

It was the exact opposite, weighing things down as we get into the middle of the week. Yeah. All right. It does it for overtime. Fast money starts right after this quick break.